Canada's Loblaw joins Primark in Bangladesh compensation pledge

TORONTO (Reuters) - Canada's Loblaw Companies Ltd (L.TO) on Monday became the second Western fashion retailer to promise compensation for the families of victims of the Bangladesh garment factory collapse that killed nearly 400 people last week.

Loblaw, which had some of its Joe Fresh clothing line manufactured at Rana Plaza, followed British retailer Primark in offering to compensate victims of the South Asian country's worst industrial accident.

"We will be providing compensation for the families of the victims who worked for our supplier," said spokeswoman Julija Hunter in an email.

"We are working to ensure that we will deliver support in the best and most meaningful way possible, and with the goal of ensuring that victims and their families receive benefits now and in the future."

Eight people including four factory bosses have been arrested over the collapse of the factory last Wednesday.

The building's owner, a local leader of the ruling party's youth front, appeared in court on Monday and police are looking for another factory boss, David Mayor, who they said was a Spanish citizen.

Some 2,500 people have been rescued but emergency workers say there is now little hope of finding anyone else alive in the rubble of the eight-storey plaza, which officials said had been built on swampy ground without the correct permits.

Bangladesh is the world's second-largest garment exporter after China. The collapsed complex housed a number of factories that made clothing for Western brands.

Hundreds of the mostly female workers who are thought to have been inside the building when it caved in remain unaccounted for. A fire overnight further hampered the last desperate efforts to find survivors.

"We are giving the highest priority to saving people, but there is little hope of finding anyone alive," army spokesman Shahinul Islam told reporters at the site.

Loblaw has said it regularly conducts audits to ensure its garments are manufactured responsibly, but focuses on labor practices and not building construction.

Loblaw said it would issue updates as it developed details of its compensation plan.

"Our priorities are helping the victims and their families, and driving change to help prevent similar incidents in the future," Hunter wrote.

Primark, owned by FTSE 100 company Associated British Foods (ABF.L), said on Monday that it was working with a local NGO to help victims of the disaster.

It pledged to provide long-term aid for children who lost parents, financial aid for the injured and payments to families of the victims.

In November, a fire at the Tazreen Fashion factory in a suburb of Shaka killed 112 people. Such incidents have raised questions about worker safety and low wages in the poor South Asian nation, which relies on garments for 80 percent of its exports.